Cleveland Clinic weathers tough financial year in 2016

Cleveland Clinic CEO Toby Cosgrove speaks with reporters after he gave his annual State of the Clinic address. (Credit: Stephen Travarca/Cleveland Clinic)

Despite the changing healthcare landscape and uncertainty surrounding the future of health policy, Toby Cosgrove, M.D., the CEO of Cleveland Clinic, said the system was able to successfully face those challenges, though there were financial shortfalls.

Cosgrove revealed in his annual State of the Clinic report (PDF) that Cleveland Clinic’s operating income took a significant hit in 2016 when compared to the year before (PDF), dropping from $481 million to $243 million. That can be attributed to decreased reimbursements under the Affordable Care Act and increased drug costs, Cosgrove said, and the drop was expected. The decrease would have been even larger, to $122 million, if not for $634 million in cost savings thanks to a systemwide “cost transformation” initiative.

Despite these figures, Cosgrove said Cleveland Clinic weathered industry challenges that “are unprecedented in their size, speed and scope,” according to an announcement. And though income decreased, operating revenue increased 12% in 2016 to $8 billion.

Other highlights from the report include:

Cleveland Clinic saw a 10% increase in same-day appointments, to 1.3 million last year. Outpatient visits overall increased by 7% to 7.1 million, and emergency visits were also up by more than 650,000.

Readmissions and hospital-acquired infections decreased. Cleveland Clinic cut its readmission rates to 13.2%, and HAIs decreased to an average of 16 per month from 23 in 2015.

The system employs more than 51,000 people, making it Ohio’s largest employer.

The system has continued to expanding its reach as well. Cleveland Clinic built four new facilities last year, with the last one slated to open in March, and has six more new buildings or renovations planned to open between 2018 and 2020.